Negotiating Action-Learning Plan

Negotiating Action-Learning Plan Paper by Feridun Sarihan

1. Situation Analysis

Through my personal, academic and business life experiences the most challenging negotiation

was when I was negotiating for promotion and salary increase while working at MEY Alcoholic

Beverages Company (now acquired by Diageo). I started working for MEY in 2008 as Sales

Planning Specialist at Sales & Distribution Department (Exhibit1) and my main duties were to

forecast sales of alcoholic beverages -like Raki, Wine, Vodka, Liqueur etc. -, deliver sales

objectives for each sales region and also plan the distribution of these products between MEY’s

distribution warehouses and customer plants/locations. When we think about the MEY’s

organization and business structure, I can faithfully say that my job at MEY was extremely

strategic and significant for company’s success, because every decision for investments, deals

and sales strategy was based on the sales forecasts.

Before going into the details of phenomena and variables of situation, I would like to introduce

myself and my value for MEY Beverages. First of all, I was graduated from Middle East

Technical University, Industrial Engineering department and this is one of the top universities

and also departments of Turkey. For instance, in Turkey there is a central exam for university

entrance and my department admits only top 1% students according to this exam. Overall, I think

that I am a hard-working and brilliant employee for MEY. Other than my academic background, I

am also experienced in my field and had one year of planning experience at AVON Products in

Istanbul Turkey before joining MEY and also had two years of experience at MEY and worked

as the most brilliant employee at the department. Overall, with my academic and business

background, I was a promising employee for MEY Alcoholic Beverages.

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Here, it is important to talk about the MEY Alcoholic Beverages Company’s history and its

business.MEY Alcoholic Beverages Company produces, markets and sells alcoholic beverages.

Its product category includes raki, vodka, gin, cognac, liqueur, and wine. The company sells its

products in Turkey and also internationally. Company was founded in 2004 and is based in

Istanbul, Turkey. MEY Alcoholic Beverages Company used to be a public company which is

managed by Turkish Government, privatized in 2004. A local holding acquired the company in

2004 for $292 MM and two years later, company was sold to Texas Pacific Group Capital (TPG)

– US based private-equity firm- for $900 MM(1). In February 2011, MEY was acquired by Diageo

Plc for $2.1 Billion (£1.3 Billion) to gain a vast distribution network in the fast-growing nation (2).

MEY is market leader in every product category and has yearly sales of average $900 MM and

$200 MM of EBITDA (earnings before tax, interest, depreciation, and amortization).

After introducing me, my duties at MEY and MEY’s history and business, the phenomena of the

negotiation can be described as my demand for promoting to supervisor position, good salary

increase (around 25%) and more power –leading a team- and improving my leadership abilities

as a result. I was working for MEY since 2008 and had been there nearly for 2 years so I knew

that it was the right time to demand this promotion.

1.1 Transcripts

After making up my mind about demanding promotion, first step is to share this with my

manager, Mr. Serdar Habiboglu (Sales Planning and Operations Manager (SPO)). As being a

specialist in the company, it is not a regular way to directly go HR director before going to your

manager. The appropriate way to demand a promotion is to first go to manager. Before going to

my manager, my strategy was (1) talking about my current situation/performance/progress and

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general issues at department – I knew that he would give positive feedbacks- , (2) Talking about

how I do in department and declaring my request for promotion.

First meeting; with Mr.Habiboglu:

What was going in my mind while each

person in the conversation was speaking:

Be brave, talk about the good things, success

and your accomplishments at the department

and come to point as soon as possible.

Great! I caught a good point and also he

looks pretty happy today so, it is also right

time to talk about the issue.

What each person actually said:

Me: Hi Mr. Habiboglu. Do you know the

latest result of sales forecast accuracy

success rate? We did it again!

SPO Manager: Oh really? This is great

Feridun! You know these figures are really

important for us since there is new company

policy that all of us will be evaluated on the

key performance indicators and as you know

the forecast accuracy rate is the most

significant index for us.

Me: Yes, I know and really give importance

to these figures, try to do my best to get

good results and good performance rating at

the end of year also. Also, I have my own

goals at the department, you know I am

working here for 2 years and I really want to

be promoted to supervisor position this year.

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At last I could tell it, I hope he doesn’t gets

my words as a threat because I don’t want to

seem as if I am blackmailing him, because

he needs me during the girls’ maternity

leaves and I want to use this but not

blackmail. Also, I know I can’t get anything

without his support.

I think I deserve this with good results and

also , you know, my friends at the

department (2 female employees at

department other than me) are pregnant and

seems like I will be doing their parts while

they are at their maternity leave, this

promotion will also be good motivation for

me.

SPO Manager: I hear you Feridun. Up to

now, I really enjoyed working with you and

you did very well at department especially

your success in forecast accuracy and in

quality project was very significant. I will

arrange a meeting with HR director and

maybe Sales Director and you. Your

promotion is ok for met but last decision will

be given by them, you know the process.

Me: Yes, Mr.Habiboglu, I know. I really

appreciate your support. So, I will be waiting

for the details and time of meeting.

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SPO Manager: Yes, Feridun. I will let you

know.

It was really promising conversation for me because I knew that if I had my manager’s support,

then it would be easier to Sales & Distribution director’s support and HR director would give

what I want and the result would be win-win result. First step is always crucial and thought that

my first step was successful; also, my colleagues’ maternity leave and my being only one to do

the work at the department was an important part in this success.

Second meeting; Sales & Distribution director, HR director, my manager and me



I am a bit anxious before meeting, because I

am not very well-prepared and my chance to

direct this meeting is so low, so this will be

like general conversation about my

promotion and final decision will be given.

Good starting, but I really wonder what HR

Director thinks, because he will be giving

the final decision.


SPO Manager: As all you know, today’s

meeting is about Feridun’s request for

promotion from specialist position to

supervisor position. In every aspect, I

support Feridun’s promotion since he is very

successful at the department and -as he also

stated- this will be a good motivation for

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him while his peers are off for their

maternity leave.

Sales Director: I agree with Serdar,

although I have been at the company for less

than 8 months, I heard really good things

about Feridun and believe that he should be

Oh no! This was really shock for me; I was

not prepared for this response, thought

everything will be very easy since they need

me, if they don’t promote me, I may quit and

there would be no one to do the work at the

department which is very strategic

department of company. But HR director

seems ignorant on this issue, time to remind

him about consequences.

promoted.

HR Director: I know the issue and read

Feridun’s personnel documents before

coming here, so impressive; however, I am

planning to stop promoting employee’s to

supervisor positions if they are not leading a

team, so as Feridun won’t be managing a

team, I can’t promote him to supervisor

position. But, I understand his salary

increase request and maybe can do

something for him, maybe salary increase of

5-7%, you know economic situation

nowadays and at most I can do this.

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Me: I can understand you; but, I don’t agree

that I won’t be leading a team, while my

peers are on maternity leave, I will be

leading all the business at the department

and also you should be aware of my

academic and work experiences. I think I am

very valuable and my salary and position is

lower than the industry average when

compared with the peers in the industry.

Oh no! I didn’t have any other job offer and

didn’t think that I would need it during this

negotiation process.

HR director: Do you have any job offer at

hand from any other company?

Me: No, I don’t, but I can bring an offer to

you if you need it. I want to be more

valuable for my company and also improve

my abilities like leadership, having more

responsibility. I am not thinking about

leaving company.

HR Director: I hear you Feridun. Glad to

hear that also. I will check your demand with

my team again and will look what I can do,

but this will be the most I can do. I will let

you know by e-mail.

After one week, I got an e-mail from HR director, saying that I got promotion as “Senior Sales

Planning Specialist”, but not a team-leading position and also the salary increase was only 6.5%

which was so lower than I expected.

1.2 Key Variables and Facts

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The major players of this negotiation process are me, my manager, HR director and partly Sales

& Distribution director. I can say that my manager and Sales director were at my side but HR

director is on the other side. Here are details of relevant players, needs, tactics, strengths and

weaknesses:

Me: I think my major strengths are been working at the company for nearly 2 years, experienced

and well-educated, successful results; my main weakness is not being a part of political groups at

the company just trying to have good relationships with others. Also, my main needs are to earn

more money, to take more responsibility and to gain more power at work. By this way, I will

have more chance to prove myself to upper level executive team and also gain “social

status/prestige”. Also, by leading a team, I will have the chance to improve my leadership skills

which I will need in the future.

SPO Manager: His major strength is being working at the company since the start of the

company, he knows everyone and also well-educated, smart and experienced –coming from

PepsiCo- in the industry; however, his level is lower than the director and this is an important

weakness for this case. We get along very well and he didn’t want me to leave because he trusted

me at the department, not controlling any work of me also sending me to the meetings. Besides, if

I leave at the end of this negotiation process, he would be in real trouble since my team-mates

were both pregnant at the same time and would leave for the maternity leave. So, this was the

worst time for losing a sub-ordinate. In addition to these, a new employee means spending time

for searching, training and waiting for him to reach required experience level.

HR Director: He is the most important person in decision-group; major strength is being director

and upper level than mainly my manager and me, also being at the company since the start of

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company. Major weakness is sales department’s being more strategic for company than HR. His

major key success indicator is keeping the employee cost in given budget limits –not paying

more-, and also wants every employee to be happy and with full performance. His main interests

are lower employee cost, lower employee turnover rates and happy employees with full

performance.

Sales Director: He is the newest one in the company but his power is supposed to be more than

all of the other parties at the table but since he is new, he doesn’t have power against HR director.

He couldn’t push him enough, since he was new those times. His main strength is being director

of company’s most strategic department but main weakness is being new to company and not

having enough power. His main need is achieving the yearly sales objectives and low turnover

rate in sales department also.

1.3 Key Lenses/Perspectives of Parties in Negotiation

In this negotiation there are two parties; one wants my promotion with parallel to my demands

and HR director who says “No” this request.

Since, two parties have different perspectives and different priorities, there is a conflict and it is

important to come up with a solution which satisfies both of the parties. For example, in my

perspective this promotion is the thing that I deserve with my background –academic and

business- and also this will be an important step in my career progress and I can say that this is a

long-term improvement for me. Also, my manager and sales director wants me to perform well

and they think that I will be more motivated by getting promotion and this will somehow

guarantee my existence in the company for a couple of years since I would be satisfied with my

desires and position in the company. My manager was at middle level position and director’s

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position was top level, also their perspective was more on efficiency side and trying to keep my

motivation at high level.

On the other hand, HR director was seeing the situation from a perspective of efficiency, he

wanted me to do the same work with same salary also do the other pregnant girls’ works while

they are at maternity leave, because he had a budget limit. In addition to this, my promotion

might be an example for other employees at other departments working with the same title with

me, and he thought that if I got a promotion they would also want to get promotion like a domino

effect. Maybe he wanted to satisfy my demand but this might cause more unsatisfied employees

at the company and more salary increase as well.

Overall, both parties have a perspective of efficiency and want to have satisfied employee; the

main difference is people my side seeing the efficiency in our Sales & Distribution department,

but HR director is seeing the efficiency in all company departments.

2. Actionable Theory and Diagnosis/Interpretation

Here, I need to analyze the situation and causes of it by the mean of individual, environmental

and organizational criteria.

2.1 Individual Causes

In my case there are four individuals; me, my manager, sales director and HR director. Here, I

will analyze the individual causes for each, which results in not coming up with a win-win

solution.

2.1.1 HR Director’s Individual Causes

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First of all, HR director has his own budget limitation that he has to be in this yearly limit for

employee salaries and a promotion means an increase in salary and this a threat for him that may

prevent him achieving his yearly performance. If he couldn’t achieve his yearly performance

objective he may not be able to get yearly bonus or he can get lower yearly performance bonus.

Secondly, HR director –as everyone- wants to use his power. Promotion decisions is most

important tool that he has and he doesn’t want to share this power with anyone else and he wants

to say “No” even if it is a reasonable demand; he thinks it is his job to say “No”. It is nature of

the business actually, in most of the companies HR is seemed like a support function, and the HR

business is underestimated when compared with the business units such as sales, finance and

operations units.

Thirdly, HR director wanted to inaugurate new company promotion policy which prohibits an

employee to promote supervisor position without becoming a leader of a team. At the current

situation, there were my colleagues working with supervisor title and not having a subordinate.

2.1.2 Individual Causes for Me

First of all, I was thinking that it is time for me to get a promotion to gain leadership skills and

also earn more money. In addition to this, a promotion announcement to all company would

increase my power and also my perception on my colleagues. People at the office would think

that “Feridun is successful and reliable that company decided to promote him at this position.”

This would mean a higher social status and also higher prestige for me at office also at social life,

I would be given more strategic projects and high responsibility and this will help me to show

myself upper level executive team and will be an advantage for me to demand higher positions in

the future.

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Secondly, there were too many supervisor level colleagues working at the office and I knew that

they were earning more money but doing same job or lower than mine and working less. I

thought that was unfair and I should have got the same salary with them. Also, acceptance of my

request to be supervisor would be a sign of promoting higher levels in the future and also this

would be a reason for me for not transferring other companies.

2.2 Organizational Causes

Among the organizational causes, the most important one is MEY Alcoholic Beverages

Company’s being a young company. Actually, before privatization it had been in business for

nearly 50 years but it was not managed with a corporate culture, the culture was more public

management style and new executive team also was trying to create a new corporate culture for

the company.

As a result of this intent, the HR team was announcing new company policies and trying to create

the new corporate culture parallel to these policies. One of the policies was about the promotion

and according to this promotion policy, if you don’t lead a team or you don’t have a subordinate

you cannot be promoted to supervisor position. The main organizational obstacle for my

promotion and the conflict is this new corporate policy.

In addition to these, there were other specialists in MEY who also wanted to promote to

supervisor position and my promotion would be a model for them and they might come up with

same demand which would be very hard to satisfy by departments also by HR itself.

2.3 Environmental Causes

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The major environmental cause for my promotion demand is the average salary rate in the

industry. When I made research among my friends who are doing the similar jobs in the similar

industries, I saw that most of them are earning more than me and this made me to decide on

requesting salary increase and promotion from MEY.

Generally, I wanted to be at the same level with my friends and the others in the industry in the

manner of salary level and title.

Negotiations Methods Used by Each Party

The two parties in the negotiation used different negotiation methods; my side used a win-win

strategy which is also very useful for both sides when we think about the long-term relationship

between me and MEY, also I used parity building method by creating alliances with my manager

and sales director.

On the other hand, HR director intended to use lose-win method and tried to keep me at MEY

with less price increase than the average industry level and also a promotion without providing

me a team which I can improve my leadership abilities. (Exhibit2)

Tones Used by Each Party

During the negotiation process each party used a specific negotiation tone. The major negotiation

tones are adversarial, analytic/civil, friendly, respectful, caring and ironic; among these tones I

can say that each party used a mix of friendly and respectful tone. Because, each party was aware

of mutual need; I need MEY to earn money and afford living my life, on the other hand MEY

needed me because they need an employee to forecasting, planning sales and distribution.

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None of the parties wanted to lose the other and tried to find BATNA to satisfy each other, in

case of using an adversarial or ironic tone; they knew that I would start looking for a new job. On

the other hand, my using an adversarial tone would cause the negotiations to end and it would

cost me my job and start looking for a new job which takes time and also there was no guarantee

to find similar job in the market also with the bad economic situation.

3. Practical Decision and Negotiating Action Plan

In this part I will explain how and why I would do it if I could act/reenact the negotiation. First I

will give the possible objectives, negotiation tone, negotiation approach, solution strategy

/outcome, tactics/techniques, negotiating tem organization and third parties and contingency plan.

3.1 Objectives

The possible objectives according to this negotiation case are:

- Quit job and look for new one.

- Accept the offer and go on working at MEY with the new position as usual.

- Accept the offer, go on working at MEY but showing the upper management that you are

not happy with this solution and try to push them –my manager and director- to change

the offer.

- Accept the offer, but come up with new request additional to this offer such as a project

leadership and increased responsibility or a promise for future leadership positions such

as department executive, insist on salary increase with at least 10%.

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- Do not accept the offer, and threat the HR director and my manager with leaving job and

they would be in trouble as others at the department would leave for maternity leave for 6

months.

- Loose some parts of requests such as instead of supervisor position, accept “Senior Sales

Planning Specialist” position but having a subordinate to lead.

If I could act/reenact this negotiation, I would use a win-win with expansionary method. Among

the possible objectives, the most reasonable and with positive sum outcome one is the option that

states “Accept the offer, but come up with new request additional to this offer such as a project

leadership and increased responsibility or a promise for future leadership positions such as

department executive, insist on salary increase with at least 10%.” By that option, I would be

satisfy my leadership skill improvement demand and also would get a promise to promote to

higher positions that can be created in the future.

On the other hand, HR director will also be in his budget limits and also won’t be violating new

HR policy rule. Overall, this objective seems like to be most possible option to be a win-win deal

for both of the parties and also best alternative to a negotiated agreement (BATNA).

3.2 Negotiating Tone

The major negotiating tones are adversarial, analytic/civil, friendly, respectful, caring and ironic.

In this case it is better to use a combination of tones; however, the two of the tones adversarial

and ironic is not very applicable in my case. Because, I think the adversarial and ironic tone

would be insulting for both of the parties and in case of the usage of these two tones the

negotiation process may end and both parties will go to lose-lose situation.

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Before starting the negotiations those times, I decided the tone to be used should be friendly and

respectful to every person in the negotiation. Major reason for this was my being at a lower level

than the other people in the negotiation and usage of an adversarial or ironic tone would irritate

the other and I can lose my power in the negotiation. They were all my managers and also people

older than me and –especially in my culture- they expect me to be respectful to them in any case.

And also I would expect them to be respectful and friendly to me and otherwise I knew that I

would leave the negotiation.

Overall, I used combination of friendly and respectful negotiation tone in real case and I still

think that it was the right negotiation tone for this case and I would use the same tone if I could

act/reenact the negotiation.

3.3 Negotiating Approach

Among the negotiation approaches –integrative/expansionary win-win, adversarial win-lose,

dialogic and internal or external third party- I would use the expansionary win-win method, by

using this method all parties will be better off on driving values/interests behind initial position

but at the end a win-win deal would be achieved.

Here, by accepting the promotion to “Senior Sales Planning Specialist” position, I would be

behind my initial position and objective of becoming supervisor but I would get a promotion and

that would be announced to all company which would also increase my perception and power in

the company and also I would gain 10% salary increase and that would be a financial earning for

me also. In addition to these, I would be leader of a project and this would provide me a chance

to enhance my leadership skills, and a promise for future promotion will be an important

advantage for a higher possible open position in the future.

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On the other hand, an adversarial win-lose or third party method is not appropriate for this case

because usage of an adversarial method would not be accepted by HR and my manager and sales

director would not want to argue with HR director because they also would not want to come to

face to face with HR director in the future. Also, third party method is not very suitable for this

case because this is was a confidential case and I could not share this process with anyone else,

also I was negotiating with the head of HR and even CEO of the company would not intervene in

this case -at least theoretically-.

3.4 Solution Strategy/Outcome

As I mentioned before, my solution strategy/outcome to solve this issue would be accepting the

offer, but coming up with new request additional to this offer such as a project leadership and

increased responsibility or a promise for future leadership positions such as department

executive, insist on salary increase with at least 10%. This would be accepted by all parties

because I would still be working at the company and would be leader of project and with a salary

increase. Also, this would be acceptable by HR director; he would be in the budget limits and

would have less employee turnover rate.

3.5 Tactics/Techniques

I would use the win-win method with expansionary outcomes and try to find a reasonable

compromise between extremes. In addition to these, I would also try to increase effectiveness of

my negotiation –one needs power, info/knowledge, skill and ethics for effective negotiation- by

increasing my power. I could do this by getting another job offer before starting the negotiation,

this would give me another card to use put on the negotiation table.

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Also, I was negotiating with a difficult person and as stated in Ury (1991), I would not react

negatively, step to HR director’s side, not reject but reframe, build a golden gate by using HR

director’s language. These tactics would make me more effective in negotiation process.

3.6 Negotiation Team Organization and Third Parties

As negotiation team, I and my manager had a talk about this issue but I didn’t talk about this

issue with sales director before the meeting, a small talk with him would give me a chance be

better organized for the negotiation. Third party usage is not applicable here, because this case

should be confidential and that means could not be shared with anyone else other than the people

in the negotiation team.

3.7 Contingency Plan

In case of an unexpected situation, such as totally refuse of my promotion demand, my

contingency plan is to start looking for a new job and quit the current one as soon as possible.

4. Techne and Transcript

In this part I will write another transcript of the meeting with my manager, sales director and HR

director. Different from the previous time, this time I will talk to sales director about the

promotion issue before meeting and also do more research on the potential jobs at the market and

get an offer from another company and in addition to these, get information about the new

company policy from my friend at HR and overall, I will have more info.



I will let my manager start the conversation

and be very respectful to all parties at the

table, I know it will be a hard negotiation but

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since I have another offer at hand also I

know my manager and sales director support

me, it won’t be a big deal to get a win-win

solution.


SPO Manager: As all you know, today’s

meeting is about Feridun’s request for

promotion from specialist position to

supervisor position. In every aspect, I

support Feridun’s promotion since he is very

successful at the department and -as he also

stated- this will be a good motivation for

Good! Everything goes as planned .

Now it is time to restate my request about

promotion with a friendly and respectful

tone.

him while his peers are off for their

maternity leave.

Sales Director: I talked about this issue with

Feridun before coming to meeting also I

heard too many good things about Feridun,

we are very pleased with working with

Feridun, he is hard working and brilliant and

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I think that he will be very beneficial

employee for MEY in the future.

Me: I really felt honored with hearing my

manager’s and sales director’s thoughts

about me. I am proud of being a member of

MEY family and my request for getting a

promotion will also be a motivation for me

while my colleagues are off for maternity

leave. I believe that I am ready to get a

leadership position and want to do more for

my company.

HR Director: I can understand you Feridun,

but we are planning to announce a new HR

It is time to come up with an acceptable

solution.

Coming up with an acceptable solution is

better since I will be able to push HR

director with a reasonable deal. Also, the

offer from other company provides me an

advantage and a solid example of my value

in the job market.

policy about supervisor position promotions

and I can’t promote you to this position

unless you won’t be managing a team, also

you want to get 25% of salary increase but I

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have my own labor cost budget limits and at

most I can do 5-7% increase.

Me: I know HR will announce a new policy

about promotions to supervisor positions but

maybe you can do something special for me

and a new position such as “Senior

Specialist” and also I can lead one of the

sales projects and by this way I can improve

my leadership abilities for potential positions

in the future. Also, I got an offer from

another company and they offered me a

salary which is 15% higher than my current

salary. Can’t you make an increase similar to

this one? I just want to get my right salary,

which is in line with my market value.

HR Director: I hear you Feridun. I will

check your demand with my team again and

will look what I can do. I will let you know

by e-mail.

5. Reflective Praxis

Actually, before the negotiating classes and writing this paper, I thought that I did the right thing

with just accepting the given offer without coming up with another reasonable solution. However,

I understood that I did several mistakes in my real case and although I had significant advantages

–such as support from my manager and director and maternity leave of my colleagues- I couldn’t

manage to use them properly. Before starting the negotiation, I thought that if I got the support of

my manager and sales director, it would be enough to get the promotion not maybe with 25%

salary increase but at least sales supervisor position –with a sales planning team- and 15-20%

salary increase. However, the reality was not like that..I did several mistakes such as not

analyzing the HR director’s need, not doing enough research –inside or outside- to use during the

negotiation, not having a contingency plan or alternative job offer to threat or at least to push the

HR director, not having an alternative solution like project leadership or future promise; these

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were all my mistakes. When HR director sent an e-mail as the result of negotiation, I just

accepted this offer and behaved emotionally and was offended. Looking back at the case, I could

use my advantages more effectively and pursue the issue and negotiation with a reasonable

solution that all parties would accept.

Other than my mistakes, I did one good thing in the real case; it was the tone I used during the

negotiation. I used friendly and respectful tone and used this tone in every part of the negotiation

and I think that this was one of the most significant right things that I did. In addition to these, I

followed the hierarchical rules, and my manager was always in the negotiation process.

References

(1) www.vikipedia.com (2) www.wsj.com

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http://www.wsj.com/

http://www.vikipedia.com/

Documents

Negotiating Action-Learning Plan